| With several emerging countries rapidly adopting the | | | | bureau once or twice a month to send money home is |
| trend of mobile phone banking, experts in the Gulf | | | | desperate to be able to send money directly from his |
| region are speculating whether traditional banking is on | | | | phone...especially if he needs to load the cash by going |
| the verge of a major transformation. | | | | to visit an agent first. |
| During a meeting of industry leaders in Dubai this week, | | | | The Gulf presents a very different situation to that of |
| there was agreement that mobile payments would | | | | Kenya's, which is the leading market for mobile |
| continue to be provided by banks in developed | | | | payments. Over 8 million of the leading mobile |
| countries, while mobile operators would begin to | | | | operator's customers have signed up for a service |
| dominate in emerging markets. However, with their | | | | called Mpesa in less than three years (1 in 3 adults by |
| unique combination of wealthy, over serviced elites and | | | | some estimates), and make regular payments to |
| poor, unbanked labourers, there is far less consensus | | | | relatives up-country. |
| as to what will become the norm in the Gulf States. | | | | There are difficulties of achieving the same results in |
| For banks and mobile operators, the stakes are high - | | | | the cross border market: For international remittances, |
| and both are rapidly signing deals with solution | | | | there are few mobile network operators that have a |
| providers and trying to gain footholds in the market. | | | | commanding market share at both ends of a |
| Banks are excited by the prospect of being able to | | | | remittance corridor, and once operators need to work |
| service large numbers of customers through a very | | | | across different networks and systems, then the |
| low cost channel, while mobile operators are eager to | | | | costs, risks and complexity of offering the solution and |
| leverage their strong brands and control of the SIM | | | | convincing customers to use it increase dramatically. |
| card in every phone to provide a new service. | | | | Many countries in the region are in a similar situation, |
| The dynamics are very different depending on | | | | where the real challenge may be to provide low cost |
| whether you look at domestic person to person | | | | payroll cards to workers, then linking the card to a |
| transfers or cross border payments. Most workers | | | | remittance platform that operates on the phone. |
| don't need to go to the potential cost and hassle of | | | | This is a game that everyone can play - including the |
| loading their salary into an e-wallet for domestic | | | | exchange houses, who offer an increasingly |
| payments purposes. Most of their spending is on | | | | sophisticated range of products. However, once every |
| consumer goods and is consumed in close proximity to | | | | phone comes with a money transfer application |
| where they live. | | | | pre-loaded (which may soon be the case given the |
| Cross border payments is another issue altogether. I | | | | recent deal between Nokia and Obopay) then things |
| doubt whether the worker who goes to the exchange | | | | could begin to change in the GCC. |